The Information Revolution and the New Public Management

Abstract

The efficacy of alternative institutional arrangements depends upon the information costs that obtain under each. The information revolution has dramatically transformed information costs and, therefore, the optimal placement of the boundary between government, non-governmental organizations, and the market. Insofar as government is concerned, many of the proposed boundary changes can be grouped under the rubric of the New Public Management. Inevitably, information technology will refashion the institutions of government and public administration and, perhaps, even the nature of the state itself.

Keywords: information costs, transaction costs, information technology, new public management, excludability, exhaustablity

JEL Classification: D73, D80, D23, L22, L33, L13